Image source @ Visual China
Text | Brain polar body
In the past year, the global lack of core anxiety has evolved from key industries such as automobiles and electronic consumption to a "huge flood" covering the upstream and downstream industrial chains and affecting global consumers.
For the areas on which strong chips rely, 2021 is a year in which the supply outage situation is almost "not top". The automotive industry has seen production cuts, shutting down some factories, and reducing shipments; smart phone manufacturers are also trapped in chip shortages, and product development and shipment speed have been affected.
As foundry capacity shifts to high-value, advanced process chips, the pressure of core loss is further transmitted to other industries.
Goldman Sachs' research report shows that as many as 169 industries around the world have been hit to some extent by chip shortages, including everything from steel products and concrete production to air conditioning manufacturing and beer production. Some small and medium-sized science and technology innovation enterprises in Shenzhen and Dongguan, such as TWS headphone manufacturers and Bluetooth interconnection manufacturers, cannot withstand the pressure of chip shortage or soaring prices, and there are not a few bankruptcies.
In 2021, the global lack of core has become a monstrous flood, hitting at a visible speed, affecting the entire society and everyone's life.
For the country, the chaos caused by the lack of core needs to be regulated.
Chips that are scarce and expensive are beginning to attract the attention of criminals. In the United States, on October 29, 2021, NVIDIA partner EVGA claimed that a batch of EVGAGeForceRTX30 series graphics cards had been stolen from San Francisco on its way to a distribution center in Southern California. As early as August 2021, China's State Administration for Market Regulation issued a news release to investigate auto chip dealer enterprises suspected of price gouging, and investigated and punished illegal acts such as hoarding, price gouging, and collusion in price increases.
At the same time, the economic recovery and changes in the situation that have been prolonged due to the lack of cores also urgently need the participation and reform of national forces. For example, the South Korean semiconductor industry, which has risen due to the support of the United States, has also diverged interests. The Korea Times believes that South Korean chip companies are actually facing the "coercion" of the US National Defense Production Law; China's chip "localization substitution" has started slowly with the acceleration of new infrastructure and digital economy in 2021.
For individuals, chips are no longer just political topics and talking points such as "supply cuts" and "entity lists", as the ultimate bearer of costs and the end users of chips, the impact of global core shortage in 2021 will begin to truly affect our daily lives.
Some consumers can not get the car because the car manufacturers can not produce, and some have to accept the operation of reduced allocation; the shipment speed of new mobile phones and the range of marketing preferences are much smaller, reducing the desire of mobile phone consumers to change; and MCU, power management chips, Wi-Fi chips and other production capacity has been squeezed, but also let more electronic functional products have increased prices, the cost of the chip industry chain has been transmitted to the end consumer.
You may ask, since the lack of cores has been going on for more than a year, until now the world has not found a solution?
Cure the core like water.
The chip semiconductor industry, which has a strong cyclical nature, is also full of various entanglements and trade-offs like the treatment of floods.
More water will be waterlogged, less water will be drought, in the chip field, production capacity often needs to be laid out in advance of the foundry, counter-cyclical construction means that there are many uncertainties, more production will kill, less production is not enough.
In 2021, fabs around the world will be operating at almost full capacity. But as TSMC Chairman Liu Deyin said, there are a large number of duplicate orders, "28nm now seems to be in short supply, but in fact, the global production capacity is still greater than demand." If you blindly establish a new factory to expand production capacity, there will be unsaturated production lines in the future.
The International Data Corporation (IDC) believes that the chip supply will achieve a supply balance in mid-2022, and by 2023, there may be chip overcapacity, that is, oversupply.
Difficulties and obstacles, obstacles and obstacles. The proposition of global corelessness, like the "kǎn" gua, is full of low-lying dilemmas, hidden dangers, and layers of risks.
The time of 2021 alone may not be enough to make the world semiconductor pattern change dramatically, but what methods and ideas China needs to use to build bridges and roads and resolve the chip crisis, 2021 actually gives us enough enlightenment.
Flood Year: How Big Is the Impact of Missing Cores?
In the Bible, there is a flood that destroys the world, and in ancient China there was a great Yu to rule the water, and the flood plague is one of the major disasters that mankind has long feared. In 2021, the "global lack of core" that occurs in the digital world is like a flood that engulfs one industry after another, turning the entire world into a large scene of anxiety, and once glamorous companies have entered a fierce fight under the threat of chip shortage and price increases.
Today, chip shortages have affected several industries. Among them, the automotive industry, which accounts for 4.7% of the industry's GDP with chip costs, is the first to bear the brunt.
The production and manufacture of modern cars involves dozens of microcontrollers, and the number of electronic components and chips in the whole vehicle is very high. Jiang Jian, president of Bosch China, once shared that the current traditional internal combustion engine vehicles use about 100 to 200 semiconductor chips, and the chips used in new energy vehicles are 5 times higher than that of traditional fuel vehicles. As long as one chip is out of supply, the vehicle cannot be manufactured.
Since the beginning of this year, many multinational car giants such as Volkswagen, Toyota, Ford, and Honda, as well as new car-making forces such as Weilai and Ideal, have been affected by the shortage of chips, and it is difficult to stop production, reduce allocation, and pick up cars. Some auto executives spoke out on Weibo: "The exhibition cars in the exhibition hall are almost sold out, and they can only put up car models." ”
Data released by the European Automobile Manufacturers Association (ACEA) shows that in July and August, new car registrations in Europe fell by 24% and 18% year-on-year, respectively, the biggest decline in the two months since the end of the eurozone economic crisis in 2013. China's car sales in 2021 also showed negative growth due to reduced production.
Another thing that is particularly stressful is the consumer electronics industry.
The use of chips used in smartphones accounted for 26% of sales, ranking first in the field of chip applications. With the popularity of 5G, the dependence of mobile phone performance on advanced processes, and the development trend of SoC chips, the number of chips required and the increase in process accuracy have challenged limited production capacity and directly affected smartphone manufacturers.
According to the Electronic Times, Apple plans to purchase 5G baseband chips from Qualcomm and Samsung, but both rejected, and the reason for Samsung's response is insufficient supply.
The absence of high-tech 5G chips means that new smartphone products cannot be supplied, and there are only competitors in front of the market. Coupled with Huawei's limited procurement of 5G chips, it is equivalent to giving up a huge high-end mobile phone market share, and in 2021, a large number of mobile phone manufacturers have begun to plan ahead, and the phenomenon of hoarding chips has occurred. According to the "Nikkei Asia" report, Xiaomi proposed to suppliers in 2021 to purchase up to 240 million mobile phone corresponding accessories plan, while Xiaomi's global shipments in 2020 are 146 million units, other manufacturers are also concocting, the demand for core chips, squeezed the production capacity of foundries.
In order to prioritize the supply of mobile phone chips, it further affects the production of other chips, such as power management chips, driver chips, RF chips, etc., which in turn makes a large number of Netcom products increase in price or emergency. Goldman Sachs' research report believes that industries that spend more than 1% of the industry's GDP on chips will be affected by chip shortages.
For example, because Qualcomm allocated chip production capacity to mobile phone chips, which in turn affected the production of a Wi-Fi chip, many domestic drone manufacturers began to lack cores; and MCU microcontrollers that are considered to be low added value, small to smart home appliances, large to intelligent manufacturing equipment, car support systems, almost all have MCU figures, but also "things are rare and expensive", the price increased dozens of times, from a few cents to nearly 10 yuan, and the car MCU chip is as high as 5 US dollars. In the end, the cost will be passed on to the terminal consumer market layer by layer, and you and I are all paying for it.
The cause of the disaster: who created the global lack of cores?
If the "entity list" is still filled with emotional indignation, then the price increase caused by the global lack of cores in 2021 is everyone's personal pain. The former could also blame U.S. politicians, but in 2021, the situation will become very complicated.
The global lack of cores, like the great Yu Zhishui, is faced with a complex and huge system full of variables and uncontrollable factors.
The first is natural disasters.
In 2021, the continuous natural disasters and repeated epidemics are delaying the recovery of the production capacity of this chip semiconductor. At the beginning of 2021, texas in the United States was hit by a winter storm, and many semiconductor factories near Austin such as Samsung Electronics, NXP and Infineon were forced to shut down; in February, a 7.3-magnitude earthquake occurred in Japan, affecting the two major silicon wafer wafer wafer factories, Shin-etsu and SUMCO plants; in March, Renesas Electronics, the main supplier of Japanese automotive chips, had to stop production for a month; in May, Foxconn, Luxun Precision, Samsung Electronics and other companies closed their factories in Vietnam; in June, More than 50 branches of more than 50 companies around the world in Malaysia have all stopped working due to the epidemic, and the local packaging and testing capacity accounts for 13% of the global packaging and testing capacity; in August, the new crown epidemic in Malaysia repeatedly, and some chip factories were shut down, which caused a lot of impact on the chips of Bosch's multiple systems, and Tesla's vehicle delivery time was extended...
In 2021, these natural disasters that occurred in key links and regions of the industrial chain directly exacerbated the tension of global core shortage.
The second is man-made disasters.
If natural disasters are accidents, then the turbulent political situation and the robbery of enterprises are the driving force behind the further severe situation.
On the one hand, affected by US sanctions, mobile phone manufacturers have had to increase their hoarding efforts, resulting in a sharp increase in demand. In addition, some companies in order to ensure continuous supply, to two or more factories to place the same order, and after the delivery of one factory, cancel the order of another factory, that is, TSMC said "repeated orders", directly affect the foundry scheduling plan, it is difficult to calculate the total order backlog, the factory then gives priority to the production capacity to high-volume orders and higher profit orders, such as Qualcomm announced at the 2021 Investor Conference, all-round force in the automotive field.
Semiconductor head manufacturers have made efforts in the automotive field, which has led to the shortage of niche chips and price increases.
In August 2021, China's State Administration for Market Regulation fined Shanghai Stront Electronics Co., Ltd., Shanghai Chengsheng Industrial Co., Ltd., and Shenzhen Yuchang Technology Co., Ltd. a total of 2.5 million yuan for the price of automotive chip dealers in accordance with the law, because these three companies significantly increased the price of some automotive chips, and sold chips with a price of less than 10 yuan at a high price of more than 400 yuan, disrupting market prices at the same time, further creating tension and aggravating panic stockpiling.
Of course, in addition to scolding God, scolding unscrupulous politicians, and scolding market brokers, we must also accept the fact that the industry law of semiconductors and the law of market supply and demand determine that the price of chips will rise.
Digital economy and online life, laptops, home network equipment and other electronic products sales increased significantly, smart home, IOT, intelligent fingerprint doors, agricultural drones, electronic fences and other traditional equipment networking, intelligent demand, meta-universe to drive VR / AR and other equipment popularity, the scale of these electronic products expanded, will lead to chip demand doubled, limited production capacity under the premise of the price will naturally rise. For example, in 2021, there will be a serious shortage of 5 million pixels and 8 million pixel CIS chips used in low-end mobile phones.
Semiconductor capacity itself is less flexible than infinitely expanding end demand.
Whether it is IDM (IntegratedDeviceManufacture) or Foundry (foundry), its capacity utilization elasticity is relatively limited, generally maintained at more than 80%, has reached 100%. Expanding production capacity requires new plants, investment is often as high as 10 billion, but also need 1-2 years of mature operation period, it is not easy to make expansion decisions, directly leading to short-term inability to keep up with market demand.
For example, most of the automotive control chips, 5G RF chips, and Internet of Things device chips are manufactured using 8-inch wafers, but the number of 8-inch wafer production lines in the world is decreasing, and new fabs often choose 12-inch wafers that can produce advanced processes, which leads to insufficient production capacity of mature process chips. Therefore, IDC believes that chip prices will continue to rise due to the material cost and opportunity cost of mature process technology.
(TSMC's revenue ratio by process in the second quarter of 2021)
In general, the unprecedented global lack of core is the result of the superposition of multiple factors, both unpredictable natural and man-made disasters, and the inevitable cyclicality and collaboration of the semiconductor industry chain.
The Road to the Ark: The and Bridges of The Chinese Chip
In the face of the lack of core floods of Haohao Tangtang, almost all semiconductor locations are trying to build dikes.
In June 2021, the U.S. Senate passed the U.S. Chip Act, requiring the U.S. government to provide tens of billions of dollars to support the development of the semiconductor industry in the United States. At the end of September, the United States held a global chip industry summit, and representatives of Intel, TSMC, Apple, Microsoft, Samsung Electronics and Ford participated in the meeting to find ways to resolve the chip shortage. The European Union launched the European Chip Act after the Digital Compass Project to improve the self-sufficiency of chips in the region.
In the opening year of the 14th Five-Year Plan in 2021, China put forward the industrial scale target for 2025, and all localities have formulated relevant integrated circuit industry plans, and the second phase of the National Fund has invested more than 40 billion yuan in wafer manufacturing enterprises. In the face of so many actions, can China's lack of core problem be alleviated?
If the lack of core is regarded as the great Yuzhi water, then there are three main directions for dredging the river.
1. Self-research.
To fundamentally solve the problem of lack of cores, we can only embark on the road of self-research and self-reliance of chips.
Taking Tesla as an example, the reason why it can still achieve good market results in the context of global core shortage in 2021 and has not been delayed by chips is precisely because it has the ability to develop its own chips, so as to quickly respond to market changes, rather than passively waiting for suppliers to cooperate.
In 2021, we can see that many car companies and mobile phone manufacturers have begun to choose self-research. SAIC and Infineon jointly established SAIC Infineon, focusing on vehicle-grade IGBT chips, and Ideal and Weilai also set up an autonomous driving team to start the self-research process of autonomous driving chips. Among mobile phone manufacturers, Xiaomi, OPPO, vivo, etc. have also announced self-developed chips. Baidu Kunlun 2 announced mass production, and ByteDance invested in a number of semiconductor companies. China's core-making road, combined with industry needs and characteristics, has taken a solid step.
2. Cooperation.
Chinese semiconductors will eventually embark on the road of walking alone, but it must be admitted that the semiconductor industry chain has in fact breathed the same breath and shared a common destiny in the world, and many key links cannot be replaced in a short period of time. Paul Bulld, CEO of Soitec, a major French semiconductor materials manufacturer, argues that even if Europe has the ability to build an important, autonomous chip supply system, it may not be able to function and will need to be supported in other parts of the world.
At present, China's semiconductor industry still has a considerable gap with the head in terms of overall design and high-process manufacturing, such as the large-scale mass production of SoC chips and memory chips of 5-nanometer processes, which must be completed through the head foundry, and the overcoming of important equipment and materials such as lithography machines is not overnight. Even if the local production capacity crisis is solved one day, the chip as a strong cycle product, if the local market can not digest the excess production capacity in the future, it will also make the local semiconductor companies face risks, so China's semiconductors can not and should not be closed doors, and need to work together with the global upstream and downstream industries to alleviate the problem of lack of cores.
How to ensure that Chinese enterprises can quickly understand supply chain changes requires improved negotiation capabilities to ensure priority supply and price stability. Some insiders have told us that this aspect requires China's semiconductor industry to concentrate on doing big things, and in some key industrial links, it can also "card other people's necks" and cultivate head companies with negotiation rights; in addition, China's huge market size can also attract overseas related enterprises as alliances, joint innovation, win-win cooperation.
3. Find another way.
The reason why Chinese chips are not pessimistic is precisely because of the global and scale effect of the chip industry chain, as long as there is a large enough market and a virtuous business cycle, one day it will be able to catch up with or even lead the development of the global semiconductor industry.
Specific to business opportunities, capital investment must be targeted, form the core advantages and "fist products" of China's semiconductor industry as soon as possible, and rank among the important seats in the world semiconductor pattern. So which markets will be opportunities for China?
1.AI calculation. At present, there is an extreme shortage of chip products related to AI computing, such as GPUs targeted by criminals, which are suitable for AI training and reasoning. In addition, the transformation and upgrading of China's industrial intelligence has also brought a large number of AI chip demand, Tsinghua University Professor Wei Shaojun has proposed that the future AI chip needs a general,high-efficiency deep learning engine to drive, chip architecture innovation lies in software-defined chips, or coarse-grained reconfigurable architecture (CGRA), to take into account both hardware programmability and software programmability. This can give full play to China's leading edge in the field of AI and make up for the shortcomings of the hardware base layer.
2. Industrial Internet. Among the digital and intelligent transformation of China's thousands of industries, the industrial Internet is one of the core scenarios, and there is a large number of chip demand, especially some low-cost, mature industrial chips. For example, Texas Instruments' analog chips have more than 100,000 SKUs, some of which are niche chips of the long-tail category, which are amplified by the scale of the Chinese market, enough to support considerable profits, and the ability of China's semiconductor industry chain can be completely done, and it is also more familiar with the personalized and differentiated needs of local enterprises, so as to continue to open up market space and commercial value, forming a virtuous circle.
Chinese believes that the solution of "Kangua" is "Wei Xin Heng, Good Deeds", which means that the heart is not afraid of hardships and dangers, and breaks through many dangers and difficulties with firm and resolute behavior. In the "flood" of lack of core, every person, every enterprise, and every country cannot be alone and can participate in "self-help".
China Semiconductor's 2021 is building bridges and roads for the future; and every choice you and I make is also adding bricks and tiles to the of China's chips. Perhaps in the near future, we will be able to break through many obstacles and see the water and drought of chip supply and demand from people, and the fertile wilderness of the digital economy.